Required information [The following information applies to the questions display

Question

Required information [The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow 2016 2015 At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets 2017 30,800 35,750 $ 37,400 86,100 63,000 51,000 113,000 82,000 54,000 10,350 9,500 5,500 277,000 258,500 227,000 $517,250 $448,750 $374,900 Liabilities and Equity Accounts payable Long-term notes payable secured by $128,000 74,250 51,000 mortgages onplant assets Common stock, $10 par value Retained earnings Total liabilities and equity 96,500 100,500 80,800 163,000 163,000 163,000 129,750 111,000 80,100 $517,250 $448,750 $374,900 The company's income statements for the years ended December 31, 2017 and 2016, follow For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income 2017 2016 715,000 $610,000 $ 414,700 221,650 11,300 9,550 $390,400 152,500 12,600 8,700 657,200 57,800 $ 3.55 564,200 $45,800 $ 2.81 Earnings per share Evaluate the company's efficiency and profitability by computing the following for 2017 and 2016 (3) Return on total assets Return On Total Assets Choose Numerator: Choose Denominator: - Return On Total Assets Return on total assets 2017 2016

Explanation / Answer

3) Return on total assets

2017 Average total assets = (517250+448750/2) = 483000

2016 Average total assets = (448750+374900/2) = 411825

Choose numerator / Choose denominator = Return on total assets Net income / Average total assets = Return on total assets 2017 57800 / 483000 = 11.97% 2016 45800 / 411825 = 11.12%

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